Vedder Price Creates Task Force to Assist Clients Impacted by the Aircraft Guaranty Corporation & Wright Brothers Aircraft Title Indictment
March 1, 2021
Vedder Price has created a Task Force to assist clients impacted by the indictment involving Aircraft Guaranty Corporation (AGC) and Wright Brothers Aircraft Title, Inc. (WBAT) filed by the United States Attorney’s Office for the Eastern District of Texas on February 24, 2021. AGC’s website provides that it “controls over one billion in aircraft value. With over 2,000 aircraft registered in more than 160 different countries.” AGC has nearly 1,500 aircraft in trusts in the United States, and WBAT is a full-service title and escrow company. Both companies are owned by Debbie Mercer-Erwin and are located in Oklahoma City. The Task Force will be led by David M. Hernandez, a Shareholder in Vedder Price’s Washington, DC office.
The seven-count indictment alleges, among other things, that specific defendants:
- were involved in a complex $350 million Ponzi scheme that “took advantage of the typical aircraft purchase transaction to dupe investors into depositing money in the WBAT escrow account;” however, the funds were not used for aircraft transactions, and, instead, the defendants diverted the money for their own uses, including a mineral mine in Guatemala, according to the indictment and the lead Assistant U.S. Attorney;
- conspired to commit aircraft export violations by failing to export aircraft in trusts as required in accordance with the export regulations, and as a result the aircraft were shipped overseas without the required export filings; and
- conspired to commit aircraft registration violations by creating aircraft trusts contrary to Federal Aviation Administration (FAA) guidance and filing documents with the FAA that were allegedly false or misleading in violation of FAA regulations.
The indictment allegations may have very serious consequences to AGC and WBAT customers. First, according to federal prosecutors, AGC and WBAT have been effectively shut down by order of the court. Second, the government is seeking $350 million in restitution, which may impact escrow clients’ access to their seized funds. Third, AGC clients who based their aircraft overseas without properly exporting the aircraft may face civil or criminal penalties and/or aircraft seizure. Fourth, all AGC and WBAT aircraft transactions, trust transfers and financing matters are now subject to prior government approval, which will delay transactions and may trigger loan or lease defaults. Fifth, non-U.S. citizens will not be able to maintain their aircraft on the U.S. registry if their trust is dissolved.
Vedder Price has been successfully assisting clients with WBAT and AGC matters, including funds recovery, aircraft transactions, trust transfers and export compliance review and rectification, since the government seized the accounts of WBAT and AGC in December. “We have a dialogue with the U.S. Attorney’s Office, and our primary focus is to assist clients with the complex issues associated with the WBAT and AGC matter. It’s important to promptly identify and resolve each client’s risks and assess the collateral damage,” said Mr. Hernandez.
The Task Force combines Vedder’s exceptionally strong aircraft transactional, financial and regulatory enforcement expertise to address this crisis as effectively and efficiently as possible. Geoffrey R. Kass, Chair of Vedder Price’s Global Transportation Finance team, noted that “as a former FAA enforcement attorney and experienced transactional attorney, David has over two decades of experience assisting clients with complex aircraft transactions, trusts and government investigation/enforcement matters, and he is uniquity qualified to lead the Task Force and resolve the issues associated with the WBAT and AGC Indictment.”
February 22, 2021Vedder Price is pleased to announce that a number of our attorneys and practice groups have been ranked by Chambers Global in 2021.
February 17, 2021
Vedder Price is pleased to announce that Elizabeth G. Silver has joined the firm as a Shareholder in its International Trade & Compliance practice in Washington, DC.
Ms. Silver is an experienced Foreign Corrupt Practices Act (FCPA), white collar criminal defense and corporate compliance attorney. She has significant experience counseling clients regarding compliance with anti-bribery laws, anti-money laundering, export controls, sanctions regulations, international criminal matters and complex business litigation. She advises multinational corporations, financial institutions and individuals on compliance with the U.S. FCPA and other anti-corruption laws, with a particular emphasis on Latin America. She helps clients navigate the complex legal and regulatory compliance issues related to cross-border transactions and global operations by conducting compliance audits and risk assessments, performing due diligence on international investments, mergers, acquisitions and joint ventures, and providing counsel related to the structure of cross-border transactions.
“We are very excited to have Liz join us in our DC office. Liz’s practice is an excellent fit for our global corporate practice and our attorneys working on cross-border transactions,” said Jennifer Durham King, Chair of the firm’s Corporate practice area. “Her litigation experience also provides bench strength for our attorneys and clients in need of regulatory compliance assistance.”
Ms. Silver added, “I look forward to leveraging the resources of my new firm and working alongside my new colleagues to broaden our service offerings and grow our International Trade & Compliance practice.”
Ms. Silver maintains an active pro bono practice, focusing on issues of civil rights, children and immigration. She has been named a Super Lawyers Rising Star each year since 2014 and is fluent in Spanish. Prior to joining Vedder Price, Ms. Silver worked at Gibson Dunn LLP and Clifford Chance LLP before starting her own practice, where she served as Principal since 2017. She earned her J.D. from Georgetown University Law Center and her B.A. from Tufts University, magna cum laude.
Learn more about the firm’s International Trade & Compliance group here.
February 11, 2021
On February 2, 2021 Vedder Price’s Pro Bono Committee held a virtual reception to recognize the attorneys and paralegals who dedicated their time to pro bono service in 2020, to draw attention to the important causes in which we partner in our communities, and encourage more pro bono service in 2021. Attorneys and paralegals who reached various milestones were recognized at both an office level as well as on an all-firm level.
The Pro Bono Committee, led by Co-Chairs Michelle Olson and Patrick Spangler, honored those who dedicated the most time to pro bono work in 2020, and those who act as advocates of the pro bono program and encourage involvement from others. The Pro Bono Committee oversees the firm’s pro bono activities and works to develop relationships with pro bono agencies around the world.
Due to the extraordinary need for provision of legal services to those unable to pay, our lawyers are committed to fulfilling their professional obligation to provide pro bono legal services to the communities in which they operate. In 2020, Vedder Price attorneys and paralegals performed 8,790 hours of pro bono legal services, a 22% increase from 2019 and a 54% increase from 2018.
We are proud to recognize the attorneys and paralegals named below for their outstanding commitment to providing pro bono legal assistance to those in need. This year, the Pro Bono Committee also recognized our Los Angeles Office as the winner of our first annual Pro Bono Champion Award, which is awarded to the office with the highest number of pro bono hours per attorney. The LA Office averaged 50.66 pro bono hours per attorney. As the winner, the LA Office will receive the traveling award to display in the office and earns bragging rights for the next year.
All Firm Awards
Most Pro Bono Hours – All Firm – Shareholder – Brett Heinrich
Mr. Heinrich dedicated most of his pro bono time to the Tree Research and Education Endowment Fund, which identifies and funds programs that support the discovery and dissemination of new knowledge in arboriculture and urban forestry. In addition to funding scientific research related to tree care and urban forestry, TREE Fund also supports student scholarships in this area and environmental educational programs for children and adults.
Mr. Heinrich also provided pro bono counsel to the Environmental Health & Safety Audit Center, which advances the professional practice of auditing in the environmental health and safety field.
Most Pro Bono Hours – All Firm – Associate –Ryan Helgeson
Mr. Helgeson contributed a tremendous amount of time to pro bono immigration matters, including a number of pro bono clients who are seeking asylum in the United States. Mr. Helgeson also continues to act as an invaluable resource for others at the firm who are working on pro bono immigration matters. In addition to his tremendous efforts related to immigration asylum matters, Mr. Helgeson also provided pro bono advice to United Cerebral Palsy and worked as the guardian ad litem for a minor who is a ward of the state.
Most Pro Bono Hours – All Firm – Paralegal – Fernando Torres
Mr. Torres assisted several pro bono clients who are seeking asylum in the United States. Notably, Mr. Torres was on the team (including Jeanah Park, Kareem Ratani and Gabe Anello) that helped a couple and their three children from Honduras receive asylum in the United States. The father, a former police officer and chief of police in Honduras, brought his family to the United States to protect them from retribution for his efforts to combat gang violence in their country.
Significant Pro Bono Contributors by Office
- Jeanah Park – Shareholder
- Ryan Burandt – Associate
- Rita Mahoney – Paralegal
- Jonathan Edgelow – Associate
- Anthony Pacheco – Shareholder
- Nate Wright – Associate
- Jonathan Wexler – Shareholder
- Victoria Jaus – Associate
- Scott Olson – Shareholder
- Mindy Wong – Associate
- Amy Bess – Shareholder
- Aleksandra Rybicki – Associate
- Jonathan Rauch – Associate
February 19, 2021
This morning, 19 February 2021, the UK Supreme Court handed down judgment on the case of Uber v Aslam  UKSC 5.
In a unanimous, landmark decision, the Supreme Court agreed that Uber drivers were “workers”, not self-employed contractors, for the purposes of UK employment law. Worker status entitles drivers to (amongst other things) 5.6 weeks of paid annual leave per year and sick pay and, crucially, to be paid at least the statutory minimum wage (which can be backdated).
The Supreme Court further clarified that Uber drivers are entitled to be paid minimum wage for the entirety of the period that they are logged into the app and are ready and willing to accept trips, and not just during the periods that they are driving passengers to their destinations.
The Court emphasised that what is important is the reality of the relationship between the parties, and noted the following:
- Uber sets the fare for its drivers’ journeys, thereby dictating how much drivers are paid for their work;
- Uber imposes its own contractual terms on drivers who wish to work through the app;
- drivers’ choices about whether to accept ride requests are constrained by Uber;
- Uber exercises significant control over the way in which drivers deliver their services; and
- Uber restricts communications between its passengers and drivers.
The impact of this decision, to Uber, its drivers and the gig economy at large, cannot be understated. Going forward, and barring legislative intervention, Uber and other businesses operating in the platform or gig economy will need to fundamentally reassess both their labour relationships and the viability of their business models in light of this morning’s judgment. How Parliament and businesses choose to respond is sure to have significant and far-reaching consequences for the shape and future of the UK economy
February 11, 2021
On January 20, 2021, the New York State Department of Labor (“NY DOL”) released new guidance (the “Guidance”) on the use of COVID-19 sick leave. The Guidance is intended to supplement prior NY DOL guidance that interpreted state legislation enacted in March 2020 (the “NYS COVID-19 Sick Leave Law” or the “Law”) authorizing sick leave for employees following a mandatory or precautionary order of quarantine or isolation due to COVID-19 issued by a public health authority, such as the NYS Department of Health or a County Health Department. Please see our prior bulletin, New York State Issues Guidance on Its COVID-19 Paid Sick Leave.
The Guidance addresses the following four topics:
1. Testing requirements
An employee who returns to work after a mandatory quarantine or isolation does not need to receive a negative test result before returning to work. However, if an employee chooses to be tested and receives a positive COVID-19 result, the employee will be deemed subject to a mandatory order of isolation, will not be permitted to return to work, and will be entitled to paid COVID-19 sick leave “whether or not the employee has already received sick leave as required by the law for the first period of quarantine or isolation.” The employee will be required to submit documentation from a licensed medical provider or testing facility to receive the paid leave, unless the employee’s employer administered the positive COVID-19 test to the employee.
2. Employees who continue to test positive for COVID-19
An employee who is subject to an order of quarantine or isolation who continues to test positive after the end of the quarantine or isolation is not permitted to report to work, and will be allowed to take a second round of paid COVID-19 sick leave for the second period of isolation, assuming that documentation is provided confirming the positive test result. The Guidance makes clear, however, that it is not recommended that employees be tested before ending quarantine or isolation.
3. Rate of pay
The Guidance further states that if an employer mandates that an employee remain out of work, despite the employee’s not being subject to a mandatory or precautionary order of quarantine or isolation, the employer must pay the employee his or her regular rate of pay until the employee is permitted to return to the workplace, or until the employee becomes subject to a mandatory or precautionary order of quarantine or isolation, at which time the employee would switch to receiving paid COVID-19 leave under the paid COVID-19 sick leave law. It is not clear whether the pay continuation being “required” by the Guidance can come from employer-provided paid time off and/or pursuant to the New York State Paid Sick Leave Law or the New York City Earned Safe and Sick Time Act.
4. How many times can an employee take COVID-19 leave?
The Guidance also specifically addresses whether employees are entitled to take job-protected paid leave on multiple occasions, and states that an employee may take COVID-19 paid sick leave three separate times in connection with three orders of quarantine or isolation – the second and third of which must be based on a positive COVID-19 test. The Guidance suggests that even if an employee has already exhausted his or her COVID-19 sick leave under a previous mandatory or precautionary quarantine or isolation (i.e., 5 or 14 days, depending on the number of employees a company employs), he or she would still be entitled to two more rounds of COVID-19 paid sick leave. If this is in fact the intention of the NY DOL, employers could, pursuant to the Guidance, be obligated to provide employees with up to six weeks of COVID-19 paid leave.
On its face, the Guidance potentially represents a significant departure from, and expansion of the benefits provided by, the NYS COVID-19 Paid Sick Leave Law. The Guidance thus may be in conflict with the Law and challengeable by employers as a result. On the one hand, the Guidance could mean that employees have the ability only to break up the 5 or 14 total days of paid sick leave to which they are entitled under the Law into up to three separate periods of leave. On the other hand, if the Guidance intends to permit employees to take three separate leaves of absence during each of which the 5 or 14 days of paid leave can be used, this essentially triples the amount of paid leave that the Law provides. It is questionable whether, in an administrative guidance, the NY DOL could alter a legislative enactment so significantly.
In addition, the Guidance’s indication that positive tests are the equivalent of a quarantine order entitling an employee to COVID-19 sick leave is problematic in that an individual who has contracted COVID-19 may test positive for up to three months after his or her symptoms have resolved.
Finally, the Guidance’s requirement that an employer continue to pay an employee whom the employer requires to remain out of work as a result of exposure or potential exposure to the virus seems to create yet another “bucket” of paid sick leave that may or may not derive from paid leave under the employer’s PTO policies or pursuant to applicable (non-COVID) paid sick leave laws.
Employers should carefully evaluate the Guidance and consult with legal counsel regarding its application.
If you have any questions about this article, please contact Jonathan A. Wexler at +1 (212) 407-7732, Blythe E. Lovinger at +1 (212) 407-7770, Victoria L. Jaus at +1 (212) 407-7745, or any other Vedder Price attorney with whom you have worked.
March 2, 2021
Please join Vedder Price attorneys John S. Marten, Jacob C. Tiedt and Kelly Pendergast Carr for a webinar presentation about the new, modernized framework for fund valuation practices recently adopted by the U.S. Securities and Exchange Commission (SEC).
The webinar will primarily focus on the required functions to be performed by fund advisers as "regulation designees" in determining the fair value of fund investments in good faith, including questions advisers may ask about current fair value practices.
During this webinar, participants will gain key insights regarding:
The identification, assessment and management of the valuation risks facing the funds advisers manage
The assessment of current valuation practices and methodologies and the implementation of additional review processes in light of the requirements of the new rule and related SEC guidance
Periodic testing of the appropriateness and accuracy of fair value methodologies
Considerations relating to selecting and monitoring third-party pricing vendors
10 February 2021
Making 2021 A Good Year: Making sure leaders and managers are resilient and equipped with the employment law tools they need.
Join us on 10 February at 9:30 GMT for a practical discussion on getting 2021 off to a confident start, looking at:
- What core training empowers managers to spot and escalate HR matters?
- Working well in the New Year — employee wellbeing and mental health in the context of 2021
- Diversity and Inclusion — getting buy-in from leaders
- Navigating 2021 — some trends to plan and prepare for
CPD Credit PendingEngland and Wales—1.0 hour CPD.